The best MBA programs? Magazine lists disagree

Magazines last year ranked the MBA program at Stanford University as the country’s best — and also its second-best, fifth-best and seventh-best.

Despite the varying results, a growing number of magazines like U.S. News & World Report and Forbes attract attention with their annual rankings of Master of Business Administration programs. They typically rank the top 25 to 100 MBA programs in the country, though some rank programs worldwide.

Critics contend that the quality of an MBA program can’t be reduced to a number, but some educators say the rankings can be helpful if used as one of many ways to evaluate business schools.

Rankings can give students a sense of the competitiveness and reputation of business schools, said James Stevens, assistant dean of student affairs at the UC Davis Graduate School of Management. The school has been ranked in the top 6 percent to 8 percent of business schools nationwide by various publications.

But Stevens and other educators say that students also should examine the various criteria and methodologies magazines use for rankings.

“Different rankings give you different results, especially depending on how much information is based on hard data and how much on opinion,” Stevens said.

Forbes ranks MBA programs solely on their return on investment. The Financial Times also uses a broader range of hard data, and The Economist bases 20 percent of its rankings on opinions of students and graduates. U.S. News ranks schools based 40 percent on opinions and 60 percent on statistics about student selectivity and later job placement. Bloomberg’s Businessweek bases 90 percent of its rankings on the opinions of students and corporate recruiters and 10 percent on how often the faculty gets published.

The diverse components within the rankings give students the ability to compare schools on the criteria most important to them, said Robert Morse, director of data research for U.S. News & World Report.

“There’s a benefit to students if they spend a modest amount of time investigating the systems and what goes into the rankings,” Morse said.

The ranking lists usually provide information on topics such as tuition, number of faculty, local leadership and other factors that students weigh when choosing a program, said Danica Ross, a spokeswoman for the University of Phoenix.

In addition, broad ranges between schools’ rankings generally reflect differences in the quality of education, the experts said.

“If two schools are ranked No. 5 vs. 15, there’s not a lot of difference,” Stevens said. “If they are ranked 10 and 75, there will be differences.”

What makes a top school

A highly ranked business school usually has a faculty that does research and is more widely published, Stevens said. The MBA program will tend to impart a broader base of knowledge.

Higher-ranked business schools also will attract a stronger student body, with higher GPAs, better GMAT scores, more work experience and higher entrance salaries, he said.

“If you’re in a network of higher-caliber classmates, you learn more, and you carry that network with you for the rest of your life,” Stevens said.

Top-ranked MBA programs typically are linked to older and larger business schools, where graduating classes of 1,000 are common.

“When I was at the University of Michigan years ago, one of my colleagues observed that the same set of schools were always in the top 20,” Stevens said. “In many ways, the rankings are self-reinforcing.”

But rankings for online MBA programs have welcomed newer business schools, like Brandman University, an accredited college within the Chapman University system. Based on criteria such as support for students and the expertise of faculty, U.S. News named Brandman as one of 14 schools on its new “Honor Roll of Online Options.”

The national listing was “a qualifier” for the school and its students, said Glenn Worthington, dean of the School of Business and Professional Studies at Brandman.

“If you went to Brandman University and you’re interviewing for a job on the East Coast, on your résumé, you can put that Brandman is a U.S. News-recognized MBA program,” he said.

Attending a highly ranked business school means you come from a recognized brand and it opens lots of doors, Stevens said.

The $360,000 MBA

So, is an MBA from a top-tier, nationally ranked university worth moving away to attend?

That decision depends on the return on investment for that education, said Sanjay Varshney, dean of the College of Business Administration at California State University Sacramento.

“If you’re considering going to Harvard, you are already doing well in life and probably making $80,000 to $100,000 a year,” he said. “So, that’s $200,000 in lost salary, plus $50,000 a year in tuition for two years.” When moving costs and living expenses are added in, graduating from Harvard will likely cost $360,000, Varshney said.

The payback period for an MBA graduate from one of the top 10 business schools averages 5.8 years, as compared to 4.5 years for their peers from non-top-10 schools, according to a 2011 study by the Graduate Management Admission Council.

Though some studies calculate a payback for Harvard taking as long as 14 years, a 2010 Businessweek financial survey of 23,000 MBA graduates found that those from Harvard earned the most over the course of a 20-year career.

The decision to move away to attend a highly ranked school also depends on the student’s job goals, Varshney said.

“If you’re looking at the national employment market, then it’s more relevant than for the regional employment market,” he said. More than 85 percent of students graduating from the business school at CSUS stay in the region, where the school has a strong presence, with 30,000 alumni in leadership positions, Varshney said.

Surveys of prospective MBA students have shown that they consult school websites, family and friends, and several other sources more often than they look at published rankings, said Bob Ludwig, a spokesman for the Graduate Management Admission Council.

“We don’t endorse any rankings,” Ludwig said. “Choosing an MBA program is really all about fit, finding the right program for you.”